A-LevelAccountingReconciliation and verification9706/12 · May/June 2016 · Q81 Mark
In an income statement carriage outwards of $5000 has been treated as carriage inwards. Carriage inwards of $3000 has been treated as carriage outwards. What are the effect(s) of these errors on the profit?
Agross profit: overstated by $2000, profit for the year: understated by $2000
Bgross profit: overstated by $8000, profit for the year: no effect
Cgross profit: understated by $2000, profit for the year: no effect
Dgross profit: understated by $8000, profit for the year: overstated by $8000
✓ Correct answer
C: gross profit: understated by $2000, profit for the year: no effect
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